Right. And I appreciate you addressing the the actual source of law, but the question isn't "Is it income?" (and therefore taxable). Of course it is. (and that's all 26 CFR 1.6-7 addresses.)
The question is, "Is it box 1 income, or box 3 income?" Maybe going at this from the other direction, if anyone can find the code or reg that addresses why interest on Savings Bonds are Box 3 income we'd be able to see that language and determine if federal tax refund interest deserves the same treatment.
